Ethiopia: What State Visit of Ethiopian President to Tanzania Entails

TANZANIA on Monday hosted Ethiopian President Sahle-Work Zewde, who held talks with President John Magufuli in Chato, District, Geita Region.

Apart from consolidating the existing diplomatic relations between Tanzania and Ethiopia, the visit will be an opportunity to explore new avenues of cooperation, including trade and investment.

The two countries have vast opportunities in common in livestock, agriculture, manufacturing, energy and infrastructure for which they can share experiences to benefit the people of the two nations.

This visit will also be an excellent opportunity for the two countries to boost their trade balance that in the past seven years improved to only 12bn/- from 946.8m/- in 2012.

Although statistics favour Tanzania with more exports to Ethiopia, the trade balance registered in the reference period is still small and presents ample room for Tanzanian investors and traders to capitalise on the relations.

Ethiopia has a well-developed leather industry, led by small and medium-scale entrepreneurs (SMEs), making it one of the leading manufacturing sectors for Ethiopia where it exports finished leather followed by growing shoe exports.

National Bureau of Statistics (NBS) statistics show that Ethiopia leads with overwhelming 60.39 million cattle, while Tanzania holds second position as it boasts of having 33.9 million cattle.

It is a chance for our SMEs to take a leaf from their Ethiopian counterparts particularly on their vast experiences to establish a strong leather industry in the country.

Tanzania's leather industry offers immense untapped opportunities for which SMEs can utilise to establish small industries that will contribute to job creation and economic growth.

When African countries trade with themselves they exchange more manufactured and processed goods and services and have more knowledge transfer and create more value.

Enhancing trade and investment relations between Tanzania and Ethiopia has come at the right time as African countries have just initiated the African Continental Free Trade Area Agreement (AfCFTA), which is set to address many important demand constraints to trade, particularly those linked to market size as well as provide solutions to supply constraints.

AfCFTA initiative focuses on trade in goods, including trade in services, investment, intellectual property rights and competition policy and possibly e-commerce.

Therefore, the visit of the Ethiopian President to Tanzania is an important opportunity and a stepping-stone for trade and economic links that will contribute to a win-win situation of the people of the two African nations.

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